Property Services

Retail Shop Design – “Keep it fresh”

I was recently in the city (Sydney) having a coffee at one of my favourite cafés. At the time I was reading an interesting article in the Australian Financial Review about the state of the retail industry and the many challenges facing it, not the least being the onslaught of overseas retailers heading to our shores. I started to drift off and think about my own shopping experiences overseas, particularly in Europe – I recalled a busy high street in Paris where I visited several amazing patisseries a few years ago.

Talking to some of the patisserie owners along that strip, I discovered that most of the businesses had been around for 45 to 50 years! The interesting part about this story was that virtually all of the shops along that strip had state of the art fit-outs that were classy, but also very much in keeping with the Parisian look and feel.  The product as you would expect, was mouth watering and visually merchandised in a spectacular fashion. It was obvious that these businesses were successful and had been for a very long time, so I asked myself what was the common thread?

Back to my café in Sydney – the coffee at this shop is good, in fact very good, probably amongst the best in Sydney. Their cakes, flans and other patisserie products are actually exquisite. Not surprisingly the shop has a quite a strong following and seemed to be fairly busy, but something has always bugged me about this café. I had never quite worked out what it was that bugged me about this shop. Then it struck me like a bolt of lightning, the fit-out, to put it bluntly it’s well…. just appalling. When I say appalling I really mean that. I am talking paint peeling from the ceiling, handwritten worn signage, sticky tape hanging from the walls, burnt out light fittings and the list goes on…

I thought to myself maybe the owners are going for the shabby chic look? Unfortunately I think that they simply didn’t care how their shop presented, obviously presentation wasn’t important to them.

But really, presentation not important, I just can’t accept that!

Good design, be it retail shops, architecture, luxury cars, jewellery, fashion, in fact any consumer product that you can think of, has good design at the heart of it’s saleability. Design and beauty are inextricably linked, the human condition innately recognises beauty, whether that be consumer items or human attraction. If this wasn’t the case, why do consumers spend literally billions of dollars every year on fashion and beauty products.

So how is it that my café retailer seems to have such a good business even though the shop looks like a remnant from the dark ages. The only conclusion I can come up with, is that they are successful despite themselves! The location of the shop, existing goodwill, customer service and product are all very good, but just imagine how much more successful they would be if they invested a little more on their fit-out.

In my previous life I worked for retail landlords and would often encounter resistance from retailers not wanting to invest in re-fitting their stores. Many of the owners would say that business was fine and that there was no need to over capitalise (despite their fit-outs being aged and dilapidated). After protracted negotiations most of those same retailers realised in the end that it was probably time to re-invest back into the business. After completing their re-fits, their sales increased immediately, in fact anywhere from 15% to 25% over the same period the previous year. That trend continued for the most part of 12 months, meaning that net profit significantly increased, in fact more than enough to cover the cost of the upgrade.

So what is the relevance to your retail business? I guess what I am saying is, the standard of your fit-out and merchandising speaks volumes about who you are and how you value your customers. A poorly merchandised and outdated fit-out shows contempt for your customers, whereas a retailer who takes pride in their fit-out and regularly keeps their shop “fresh”, demonstrates that they truly care about their customers.

I am not suggesting that you rush out tomorrow and outlay massive sums of money on a new fit-out if when it is not required.  Often you don’t need to outlay large sums of capital, just by addressing key design elements, such as paintwork, lighting and signage. Items such as these can make a massive improvement in presentation, but be relatively inexpensive.

If you do need to invest in a large scale upgrade and require finance for the project, then I’d suggest you lock in a very low interest rate while rates are at record lows, but try to payout the loan as quickly as possible. Due consideration should also be given to your lease tenure – For example, I wouldn’t be outlaying large sums of money on a new fit-out when you may only have 2 or 3 months remaining on your lease with no guarantee that your landlord will be offering a new one.

I know this may sound pretty fundamental and perhaps a little corny, but keeping your shop fresh is very similar to personal presentation, you should always look your best on all occasions.

While this article is fresh in your mind, why not go back to your shop (or shops) tomorrow with new eyes – pretend for just one moment that you have never seen your shop before and really try to be partial. You could also invite a third party, maybe a friend or family member who hasn’t had a lot to do with the business. If their and your first reactions are pleasant, then you’re probably doing a good job of keeping your shop fresh, but if the reactions are negative, perhaps it’s time to think about hitting the “refresh button”.

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